Episode 8 (pt2): Company Health Beyond Profit
Luke Gaydon, CEO of youdo discusses the impact of ESG and CSR with Carrie Walecka, Chief People Officer at Yapstone.
Executive Summary
The HR function is now a key driver to any organisation. In the past, HR was responsible for bringing in employees to fit business requirements - now focus is more on employee experience and ‘how to develop that person’
Leadership roles:
Covid and a more dispersed workforce meant that organisational cultures have changed - the old way of ‘leaders leading by presence’ was/is no longer possible
Covid coincided with the millennial generation coming into leadership roles - they have a better perspective on things like corporate responsibility, mission and environmental footprint. Millennials are also gaining buying power across the world - their requirements are more important.
Generation Z have started coming into the workforce. They’ve learnt to live screen first/people second & are comfortable with technology replacing 'in-person' in away that other generations are not.
ESG/CSR:
Gaining importance with all audiences but ESG teams are generally lean - HR is having to add to workload to others
Getting audiences to engage is difficult unless its led by the C Suite and is perceived as a real direction and not paper pushing or greenwashing
ESG is growing in importance - if it isn’t on a company’s values - then an organisation won’t be employing the right people to develop its ESG offering. ESG has to be part of the entire employee lifecycle.
People think ESG comes at the cost of the bottom line, but it actually drives your bottom line (Patagonia example)
Last 3 years has led to a better balance of business priorities - with leaders, employees, suppliers and customers all becoming more aligned.
Luke - Carrie we finished the first part of our discussion talking about the relationship between HR & ESG. Staying with ESG, one of the things that we hear from companies that we speak to - and it's a problem that we are trying to help people solve - is that it's not always easy to get your people to engage with your ESG strategy. Does that resonate with you?
Carrie - It’s like a lot of initiatives and strategies. If it's already relatively in place, then you've also theoretically attracted people to your organisation that care about it. But if you are starting from scratch, you might have an employee population that only kind of cares about it, right? They didn't come to your company because of your strong stance on ESG. So that's harder because you don't know what you're working with yet from a level of interest or motivation. This is why it's worth spending the time trying to find some of the steps or the actions that your people would care about to then contribute to ESG. That's where you get the interest and the motivation versus saying ‘we as an organisation care about this particular aspect and we'd love your help’. If that particular aspect doesn't resonate with someone, they just might not make the time. BUT if you can say ‘look we really want to make an impact, can we create some shared thought leadership on what matters?’ That's when you get people to want to pitch in, roll up their sleeves and spend the extra time. And then you fast forward a couple years, you've got something going and then people are saying I want to work at that company, because they really are doing this right.
I think about Patagonia - they mean it, and they do it, and they live it and they breathe it. It's in every part of their business. There's no one working there that wouldn't want to participate or contribute. And they were doing it before it was cool or trendy. They have no problem getting people on board, because that's what they hire! Right now companies talk about hiring towards their values. And oftentimes that's the handful of things that would have been in the office on the wall. Right? If ESG is not one of your values, then you're probably not interviewing towards it. So you're probably not bringing that talent in. You have to make ESG part of the entire employee lifecycle. But the other thing, honestly, is organisations that really have that strategy and are nailing it, they're typically doing better. People think it comes at the cost of the bottom line, but it actually drives your bottom line.
Luke - I think it was the founder of Patagonia who said ‘profit is what happens when you do everything else right’. You've worked for global organisations and had global roles. How far ahead - or behind! - do you think Corporate America is, when it comes to ESG?
Carrie - So my first thoughts are, wow, you're bringing out the competitive streak in me! What's really been cool about working for a global organisation is that - post-COVID - we've all had to come together and figure out how to truly serve a global employee base. And that's been helpful. So in that regard, the race is always changing. An example of where the US is way behind would be parental leave and support. This is something that stems from the government’s statutory requirements but it means that companies can just rely on the basics and not have to really rise to the occasion here. Europe was also so far ahead in terms of privacy and GDPR and I don't even know if we're catching up yet. When it comes to ESG, I don't know if we're really ahead, or if it's just that we've decided we're going to market the hell out of it and we’ve got a louder megaphone!
Luke - I worked for a Swedish company for a (very happy) couple of years. It's very clear to me that they are probably leading the US and the UK in a number of ESG-related areas and one of the key reasons for that is that it is part of their national culture. And that is reflected in the way that their corporate structures are set up and how companies behave.
Looking ahead, do you feel we’re now at a period where we can put all of those COVID learnings into practice or do you think we’re still in the learning stage?
Carrie - I think we're still a little bit in the COVID hangover but I do believe we will come out of it relatively soon. And what I hope for from a workforce perspective is that there's a better balance of power, intention, and accountability, for employees, leadership, and even for customers. I hope that there's a better balance of priorities from a corporate level of the employees and the environmental/social impact being a priority along with the bottom line. I think it's still going to be a little bit of a slog to get there. We've been hit with some real hard truths in the past couple of years and the companies and individuals that choose to acknowledge them and not forget them, are going to be better for it.
Luke - Last question. If you could give one piece of advice to someone running a company today, what would it be?
Carrie - I would say, listen, and make it worth it. Listen to your employees, listen to your customers, listen to your fellow leaders. And just make it worth it for people to either spend their time, talents, or money with you.
Luke - Carrie, thank you so much!
